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Energy Efficiency in India –

Challenges & Lessons

Ajay MathurBureau of Energy Efficiency

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Energy demand in India will increase by a factor of 1.5 to 2.5 by 2030

Energy consumption in India was about 750 mln toe in 2011

• Per capita supply was about 0.6 toe• Per capita consumption was 0.4 toe

Supply is expected to grow to 1200 mln toe (IEA) to 1700 mln toe (India Inte- grated Energy Policy) by 2030

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How much energy is required ?

A minimum energy consumption of 2.3 toe/year/cap is needed today to achieve HDI of 0.9 Countries which “develop” later achieve transition at lower energy levels Probable that transition may occur at 1.5 toe in the future Enhanced energy efficiency is essential to enable early transition

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Energy efficiency in India – the context

Energy prices are high in India• Industrial and commercial consumers pay

electricity and petroleum product prices that are amongst the highest in the world

• Household consumers pay electricity and petrol prices that are highest in the world relative to their incomes

• Increasing imports will keep prices high• Consistent reduction in energy intensity; Investment in energy-efficient goods

is estimated to be about Rs. 50-100 billion annually Energy efficiency reduces costs, energy imports, GHG

emissions, and pollution, but penetration is limited because: • High first costs deter users, especially households• New technologies are perceived as being risky, especially by industry• Costs and benefits accrue to different people, especially in the case of

buildings

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Regulatory Framework for energy efficiency in India

Energy Conservation Act, 2001 Created Bureau of Energy Efficiency Appliance standards and labeling Energy consumption norms, and energy-use reporting

requirements for energy-intensive industrial units Energy Conservation Building Code for commercial

buildings Certified Energy Managers and auditors

National Action Plan for Climate Change, 2008 National Mission on Enhanced Energy Efficiency

provides mandate for market-based mechanisms to promote energy efficiency

National Mission on Sustainable Habitat seeks to incorporate energy-efficiency requirements in building byelaws

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Information helps consumer decisions

STAR RATING FORBUILDINGS

Energy Performance Index:

Category of Building :

Type :

Climatic Zone :

Connected Load :Build up Area :

Name of the Building :

kWh/ sq m/ year

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Labels built up as a “brand”

Voluntary labels for refrigerators and airconditioners introduced in December 2006

Aggressive advertising and outreach promoted labels as a brand of superior products – manufacturers piggybacked on label advertising

Labeling became mandatory for four products (where market transformation was well under way) from 7th January, 2010

Voluntary labels in place for eleven other appliances Refrigerator and air conditioner standards and labels

tightened periodically Labeled products bought for check testing Labeling seldom works if payback period is more than 4-5

years; maximum sales is of products with 2-3 years payback

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Super Efficient Equipment Programme

Focus on LED Lighting Encouraged cities and villages to procure and install LED lights Notified LED standards – first in the world Repeated bulk procurement of streetlights and bulbs LED bulb (60-W eqvt) prices have come down from Rs 1200 in 2010 to

Rs. 290 in 2014

Incentives for Super Efficient Fans 30 million fans are sold annually with an average rating of 70 W Share of 5-star (50 W) fans is less than 3%; payback period is +4 years SEEP will offer an incentive of upto Rs. 500 for each fan sold that has a

rating of 35 W, or less; Incentive will be released to manufacturers after third-party verification of sales and energy consumption tests of samples; Incentive will be tapered off in last two years

Large market outreach programme Demand is expected to stimulate production lines and volumes, leading

to cost reductions, and a sustainable market share for SEEP fans

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New buildings have huge potential – which very difficult to achieve

Approximately two-thirds of the buildings that will exist in 2030 are yet to be built

Energy Conservation Building Code (ECBC) issued in 2007 to guide design of new commercial buildings – where there is largest scope for efficiency improvements

ECBC has to be notified by states, and incorporated into building byelaws and enforced by municipalities; currently seven states (out of 35) have notified it; enforcement mechanisms are being strengthened

ECBC-compliant buildings use less-than-half the energy used by conventional buildings; incremental costs have reduced from 20% in 2007 to less than 5% now

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Large bandwidth in specific energy consumption in all sectors In almost every sector, the most energy-efficient unit is also amongst the most efficient units in the world

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550-600 600-650 650-700 700-750 750-800 800-850 850-900 900-950

Thermal Specific Energy consumption, Kcal/kg-clinker

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Huge Diversity in Specific Energy Consumption within industrial sectors

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Perform Achieve and Trade

Specific Energy Consumption (SEC) targets mandated for 478 units in 8 energy intensive sectors• The sectors are: Aluminum, Cement, Iron & Steel, Chlor

Alkali, Thermal Power Plants, Fertilizer, Pulp & Paper, and Textiles

• They account for one-third of fossil-fuel consumption• Targets are less (in % terms) for efficient units; more for

less-efficient units• Targets to be accomplished in 2014-15; new cycle with

new targets after that Energy Savings Certificates will be issued for excess

savings; can be traded and used for compliance by other units

Financial penalties for non compliance Baseline conditions have changed; normalization factors

being developed

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Huge spread in Specific Energy Consumption within sectors

Target is Plant Specific …… Less for Energy Efficient and more for Inefficient Plants

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Energy Savings Achieved

11th Plan (2007-12) target has been surpassed, but pattern of savings is very different from that originally estimated

Breakup of targeted avoided capacity during IX plan & Target achieved

Sl.No. SchemesTarget for XI Plan

(in MW)

Achieved during XI Plan(in MW)

1 Standards & Labeling 3000 77662 Energy Conservation Building

Code & Existing Buildings.500 14

3 Bachat Lamp Yojana 4000 3244 SDA Strengthening Programme   1065

5 DC & SMEs 500 26 Agriculture & Municipal DSM. 2000 1

7 EC Awards   1664TOTAL 10000 10836

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Impact of Energy Efficiency on the National Economy

Energy savings: 26.4 million toe (29% of the total energy saved due to EE) during 2000 to 2011.

Avoided generation capacity during 2007-12: 10,836 MW

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12th Plan (2012-17) Targets

Programs 12th Plan Targeted savings (2012-17)

  Electrical Energy Savings (Billion Kwh)

Thermal Energy Savings (million toe)

Standard & labeling 10.4 4.3

Perform, Achieve and Trade 11.96 10.41

ECBC 5.07 -

SME 1.83 1.59

AgDSM/MuDSM 0.47 -

BLY 4.4 -

SEEP (LED) 6.6 -

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Challenges & Lessons

Difficult to predict outcomes of programmes; feedback mechanisms and decision processes to enable constant monitoring and adjustments are essential

Benchmarking – of use patterns and energy performance of technologies - is very country specific; enabling it is an essential first step

Human and institutional capacity to measure, analyse and to integrate into mainstream sectors is limited; this is further confounded by multi-level governance regimes

National and international programmes to strengthen capacity around policy, technological or commercial transactions is important

Enforcement and monitoring are major challenges, and can add significantly to costs; public policies need to rapidly convert technological opportunities into “branded products”; targeted outreach programmes can be very effective

Higher first cost is a barrier; with adequate and credible information, people and organizations can make investments with paybacks of 2-5 years; higher payback periods require incentivization

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Energy Imports are increasing

70% of petroleum/ products are imported Expected to increase to

80% by 2016-17 All additional demand

would be imported

Coal is now being imported ! Current imports are 10% Expected to increase to

30% by 2016-17